User blog:SachinGMU/blockchain 101
The most well-known digital asset in the world is a primary example of a current use case of blockchain technology, that being Bitcoin. Bitcoin is a decentralized digital asset that provides a mean of exchange that requires no central authority and that could be transferred digitally anywhere, to anyone almost instantaneously. Cryptocurrency’s power resides within this aspect of decentralization. In more economically developed countries this aspect is not as heavily important, as the native currency (known as FIAT) holds value and is attainable/available for all. Countries such as Venezuela are not as fortunate, The Venezuelan currency experienced one of the worst hyperinflation periods since world war II. Coffee costs 2,800 (Bolivars) up from .75 bolivars seen early 2017 (Salvo, 2019). High inflation is what led the people to adopt Bitcoin into their society as it was a more stable alternative to their fiat currency. People were drawn to the fact that they finally had total control over their finances, the Venezuelan hyperinflation did not affect them if they weren’t reliant on the currency. Many Venezuelans receive remittances through the form of Bitcoin from outside the country since there is no middleman transfer fees nor are there large time delays between transactions since there is no processing to be done by a third party (such as PayPal). Citizens in countries such as Venezuela now have the power of financial autonomy brought by blockchain technology. While cryptocurrency is the most well-known and a well-established use of blockchain technology, it is important to note that the creation of a blockchain does not coincide with cryptocurrency, as blockchain can exist and function without cryptocurrency but not vice versa. Blockchain technology used in banking and finance enables banks and corporations to make cross-border money transfers providing real-time settlement and a reduction in costs. Distributed ledger technology allows for oversight since the entire ledger is recorded and immutable, enabling a company to be audited through their blockchain ledger (ConsenSys). In trade finance networks, blockchain is assisting businesses digitally store know your customer (KYC - process of verifying the identity of customer) and provide real-time verification of financial documents (ConsenSys). Banks such as India’s ICICI bank are experimenting with using blockchain to improve KYC, and banks in Singapore are implementing this tech for AML purposes (Karsch, 2018). Global supply chains support everything from packaged goods to global product recalls. Given our current technology, supply chains have a drastic room for improvement in efficiency, audible tracking, and the limitation of exploitative behaviors (ConsenSys). Large companies and supply chain leaders are realizing the power blockchain can bring to their industry. Blockchain brings traceability, enabling organizations to understand their supply chain better and engage consumers with real, verifiable, and immutable data. Transparency is also brought, building trust by capturing data and providing open access to data. Similar to how stock exchange operates, one may tokenize and asset by splitting an object into shares which digitally represent ownership. These tokens are traded and ownership can be transferred completely digitally. Treum, a ConsenSys formation worked along with the World Wildlife Fund and Traceable to revolutionize the tuna industry. By putting RFID tags on caught Tuna, the geolocation of the catch was linked to a blockchain, thus confirming the fish was caught legally and in sustainable waters. As Treum states “This is the first step in a fully transparent process that continues through the entire supply chain” (ConsenSysMedia, 2019). The energy industry has been slow to embrace change, blockchain promises to speed things up as well as transform the industry’s processes and markets. Along with the implementation of blockchain technology comes peer to peer energy trading. Distributed Energy Grids (DERs) or independent renewable energy sources (solar) that are connected to the grind helped convert energy consumers into producers, who are able to sell excess power back to the grid (Sharma, 2019). This process retains the existing dynamic of electricity markets, centralizing buying and selling under the control of the utilities. Bitcoin’s decentralized network would disrupt this system as it would enable users to sell excess power to one another. Another use for blockchain within the energy sector is the use of Cryptocurrency as form of payment. Marubeni Corporation (MARUY) accepts crypto payments for energy in some regions of Japan (Sharma, 2019). The verification process (depending on the chain) takes a large amount of computing power and leaves a heavy ecological footprint as the process is verification through all the nodes in the network. This process on the Bitcoin network reportedly takes as much power as Hungary (Orcutt, 2019). Global environmental sustainability solutions are one of the largest global debates as of now. Blockchain energy sustainability research is required and extremely important to the mass adoption of the technology. Future use of blockchain short term 10-25 years will primarily be adoption, after that it is adjusting and improving the implemented technology. In the coming years blockchain is being looked into for preventing voter fraud in the United States. The system is to be beneficial for voting as the process could be made online, this was previously attempted but due to the technology used there were far too many outcomes of malicious and unethical activity (Liebkind, 2019). Voters can confidently submit their vote without revealing their identity or political preferences to the public. Votes counted can be verified and traced back to the posted block, meaning no malicious voting. In addition to increased security and affirmation of an ethical voting system, voting online would bring a lager voter turnout due to convenience resulting a drop of voter apathy. Voting currently costs between $7-25, and blockchain would reduce this to as little as $.50 per vote (Liebkind, 2019). While the technology may be a solution to the outdated and untrustworthy voting system, it may be years until it is adopted into the voting systems due to governmental regulation and security. Category:Blog posts